Consumer confidence: broad based stabilisation
ANZ-Roy Morgan Australian Consumer Confidence firmed 0.8% to 119.8. The details were positive, with four out of five subindices posting gains.
Households’ views towards current financial conditions bounced 2.9% last week, more than recovering the 1.9% fall in the previous week. Similarly, households were also more optimistic about future financial conditions, which increased 2.3%.
Consumers’ assessment of current economic conditions jumped 4.1% to 112.0, entirely reversing the 3.8% fall in the prior week. Views towards future economic conditions edged up 0.3%.
Going the other way the ‘time to buy a household item’ subindex tumbled 4.3% to 136.9, its lowest point in eight weeks. Four week moving average inflation expectations edged down to 4.2%, despite the weekly print coming in at 4.4%.
ANZ Head of Australian Economics, David Plank, commented:
“It is encouraging to see a broad based stabilisation in confidence at elevated levels. Looking at July, aggregate financial conditions have largely tracked sideways. Meanwhile, aggregate economic conditions declined slightly over the month but remain above their long term average (112.8 vs 107.9). We think the resilience of consumer confidence indicates that the strength of the labour market is more than offsetting the weakness in housing and other concerns.
On the weaker side the ‘time to buy a household item’ subindex has fallen from its peak at the start of July, losing nearly 4 points over the month. While the subindex remains above its long term average, we will be watching it as the consumer remains vulnerable – in our view – given high levels of debt, falling house prices and sluggish wage growth.”